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April
11
2019
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Sound Money From A Biblical Perspective
In today’s world, it is obvious that the competition of ideas is under serious threat and with it, the much-needed discussions on how to deal with certain topics or try to understand the world we live in. That is particularly worrying, especially when one considers that the western world went through the process of Enlightenment roughly 200 years ago. In the words of Immanuel Kant:
He held that one’s ability to express oneself freely and honestly was essential for enlightenment. When men start expressing their thoughts and opinions freely and without fear of any sort of punishment, reasoning and new ideas surface, which is paramount to enlightenment. And yet, today, we are living again through a period of time, where especially people who claim to “protect us from ourselves” believe that restricting speech and putting boundaries around the exchanges of ideas is for the greater good. Thus, guided, shepherded thought and carefully managed dialogue is becoming the norm, instead of individuals reading, thinking, debating and deciding what they believe by and for themselves. In this sense, you should not look at this article from a purely religious perspective. Instead, you should also focus on the ideas and lessons that one of the oldest books, and arguably a fundament of western civilization has to offer. I myself am not a religious person, however, I still find these core principles, values and lessons undeniably constructive and relevant to this day, while the central idea and understanding that spirit comes before matter is especially important. Being born and raised in Switzerland and having always been interested in history as such, I am reminded of part of the “Rütli oath” which is fundamental in understanding the Swiss:
Therefore, I hope that even a hardcore atheist will read this article with an open mind and hopefully see that the biblical findings on what is money and the values linked with it are very interesting indeed. Gold and Silver in the Bible There is a solid body of historical research and records that document humanity’s relationship with gold and silver and their use as money for thousands of years. Evidence stretching back to the fourth millennium BC, clearly documents the role that precious metals played as mediums of exchange, as the Egyptians, Mesopotamians and Ancient Greeks heavily relied on gold and silver to facilitate their economic activities and trade. Another important source that describes gold’s relevance and core functions over the course of human history and civilization can be found in the Bible, as the religious texts and scriptures include ample references and solid support for the prominent position that gold and silver historically enjoyed, not just economically and commercially, but also spiritually and symbolically. To analyze and interpret some of these references and to place them in their proper context, I sought the expertise and insights of Iustin Rosioara, author of God’s Money: An In-Depth Examination of the Bible Verses that Mention Gold and Silver. His expert input, findings and conclusions, provided not only a number of interesting examples, but also the wider conceptual and historical background and structure necessary for a meaningful analysis of this topic. An examination of the biblical foundations and origins of “sound money”, clearly reveals that it is difficult to isolate gold from silver. Based on the scriptural references and the relevant context, more often than not, the two metals appear intertwined, with their symbolic values being interlinked and complementary. In the Bible, gold represents righteousness. It is indestructible, it is pure and in nature it does not combine chemically with other elements. At the same time, silver symbolizes redemption. As many will remember, it was used to pay Judas for betraying Jesus, but it also has important cleansing and antibacterial properties. Thus, these metals are normally linked, as what they represent, righteousness and redemption, also cannot be separated. Without God’s righteousness, redemption is not possible and righteousness cannot be achieved without redemption. When only one of the metals is used by itself, that particular context will reveal a special applicability for that metal. Genesis 2:11-12 “Gold is good”
As a general rule, when a concept is mentioned for the first time in the Bible, the context that it is mentioned in will determine the main application of the concept. Therefore, the statement that “gold is good” needs to be looked into from this perspective. The word translated to “good” [in Hebrew “tob“, pronounced “tov”] is a word that has multiple meanings. First, as an adjective, it means “good”, “pleasant”, “excellent of its kind”, “valuable in estimation”, but as a noun, it also means “welfare” or “prosperity”. The context of Genesis chapters 1 and 2 is important too, because these are the chapters where mankind receives its mandate: “to be fruitful, multiply, fill the earth, and subdue it”. There is a clear economic aspect to this mission, as humanity is tasked with managing the resources of the Earth. And this is the context applicable in this reference to gold. Therefore, in this context, there is a requirement for two basic elements: material substance (matter) and work (labor). Material substance is God’s contribution to this process. Work represents man’s contribution to growth and development. Where no human labor is involved, nothing grows; everything stagnates, or things grow chaotically. Through work, man is supposed to cultivate selectively, help establish order over chaos, and to spread and multiply the more desirable and enjoyable elements of life, while protecting them from predators and threats. In the process of development, as labor is continually applied to matter, accumulation of goods and labor specialization is inevitable, eventually leading to excess and thus to trading. At this point, seen from an economic perspective, everything that is valuable on the earth and is supposed to be used as money, must contain the same two components – material substance and labor. In this light, usage of fiat money in trade provides the set up for and facilities unfair exchanges, as one party is giving away real goods and services (containing material substance and labor), but what he receives in exchange is immaterial and only has illusory value. An exchange is fair only if it is founded upon the same premises and if both parties receive things of the same nature. “Keseph” = “silver” and “money” In the original Hebrew text, the very same word is used for money and for silver: “keseph”. Due to the specifics of the Biblical Hebrew language, whenever one single word is used in multiple contexts and has multiple meanings, all those meanings are strongly connected. In addition, many words are built on the foundation of “root words”. This means that when multiple words are derived from the same “root”, all those words and the concepts they represent are also very closely related. Whenever payments are made in different transactions, the price to be paid is, with few exceptions, expressed in “keseph”. Throughout the entire Bible, silver plays a prominent role, as the designated medium of exchange to be used by merchants. The equivalence between silver and money can be easily observed reading the chapters about Joseph, probably the first historical depiction of an economic cycle – seven years of abundance, followed by seven years of severe famine. With a clear understanding of what is about to come, Joseph offered Pharaoh a simple and straight-forward solution: save one-fifth of the crops during the years of abundance and compensate the losses during the years of famine. As the people were not prepared for the crisis and they had no food, the outcome was that “Joseph gathered up all the money that was found in the land of Egypt, and in the land of Canaan, for the corn which they bought: and Joseph brought the money into Pharaoh’s house.” [Genesis 47:14, KJV] In this verse, the word translated as “money” is “keseph”.
The value of silver and gold is given by their own nature Neither gold nor silver has value expressed in other units of account. Their value is expressed directly in their own weights. Everything else that is valuable (other assets, commodities, goods, services, or performed labor) is measured against a certain weight of these metals. In other words, the value of gold and silver is assigned by their own nature, while the value of a transaction is measured by the quantity of the metal that changes hands. A great example of this can be found in Genesis 23:16, in which Abraham was purchasing a plot of land to bury his wife:
It’s important to note here that a “shekel” is in fact a measuring unit for weight, not a monetary value, as contemporary reader might assume. This is the reason we are told that Abraham “weighed out for him the price”, and not that he simply paid Ephron the agreed price. Measuring value in terms of weight offers a consistency that no currency is able to provide. This is because weight does not change over time. Many different units of weight measurement have been used over millennia and are still in use today, but the weight itself does not change. One troy ounce will always be one troy ounce, one gram will always be one gram and one troy ounce will always be 31.1 grams. Genesis 13:2 “Abraham was rich in cattle, silver and gold” The fact that Abraham was rich in cattle, silver and gold is not only a reference to a man being willing to obey God, but it is also a description of a complete economic model, based on three fundamental functions that all humans need and that all economies are built on: Production; Exchange; and Wealth accumulation. Cattle represents productive activities. Apart from sustaining the owner and his family directly, it also provides growth, following the “seed and harvest” principle established during creation. Being rich in livestock, Abraham had access to an asset that allowed for continuous production and growth. It was not only a source of revenue, sustaining him and his family, but it also ensured a flow of goods that was steadily increasing. As the revenues of productive activities increased, the overflow or excess of goods are sold and exchanged for keseph (silver money). Using metals as a medium of exchange proved to be very convenient because of their universal acceptance. Their value was determined by their scarcity. Silver was scarce; and the fact that it required more labor to extract and refine, made it valuable. By exchanging his production overflow for silver, Abraham was able to accumulate a non-perishable asset that could be used later to acquire whatever he and his family members needed. Therefore, we can say that silver represents the second fundamental economic function: exchange, or trade. As this process expands and more and more silver is accumulated, the excess silver is exchanged into gold for wealth accumulation. Gold is approximately 15 to 20 times scarcer than silver, and because of its physical and chemical qualities, and difficulty to extract and purify, gold is much more valuable than silver and it provides the ultimate storage vehicle of accumulated value. Equally importantly, gold, like silver, does not represent someone else’s liability. Assets that represent someone else’s liability derive their value from that party’s ability to deliver on a promise. Only assets with intrinsic value can be considered God-given, simply because God alone can make unconditional promises. While both silver and gold serve as God’s defined mediums of exchange, their usage is somewhat different. Silver is supposed to be used for everyday transactions, where the value of the goods and services exchanged is relatively low. Gold is used for higher value transactions, wealth accumulation, and wealth transfer to future generations. Overall, the economic model based on these three fundamental functions (production, exchange/trade and wealth accumulation) is applicable for individuals, communities or entire nations. All three elements are necessary. If any of the three areas is missing, an economic system, regardless of its scale, is imbalanced and unsustainable in the long run.
For the benefit of a nation’s people, God also wants to avoid circumstances in which the rulers of that nation – be they ancient kings or modern governments – decide to enrich themselves and back that up with decrees. The combination of power and money is probably the most corrupting factor in a human society. Power can be used to generate money, while more money allows the acquisition and consolidation of more power. This ultimately leads to a vicious circle, that leaves fewer and fewer opportunities and options for the individual. It also often reflects the age-old truth of Lord Acton’s words, “power tends to corrupt and absolute power corrupts absolutely”, resulting in a structure that stands in stark contrast to God’s commonwealth model. We can see the very real dangers and real-life implications of this in modern societies too, where the government can use its power of the purse to shut down voices that are critical of the wrongdoings of corrupt officials or speak out against immoral policies and injustice. Conclusions One of the greatest challenges that we are currently facing, especially at the individual level, is the fact that we are forced to operate in an economic and financial environment that is so far away from what we believe in. Whether for religious reasons, or for philosophical and moral reasons, or even for purely economic ones, many of us believe in individual freedom, personal responsibility, sound money and a government that does not have the ability to create currencies out of nothing. However, we have to deal with the exact opposite every single day. The current system, which contradicts basic economic principles, and often common sense too (e.g. the idea of negative interest rates), places the responsible, prudent individual at a significant disadvantage. Try as we might to do our solemn best to work hard and expand our “productive activities” and grow our income, this income is in the form of fiat money, imaginary values subject to inflation and volatility. It is losing purchasing power over time and without being able to save, it is impossible to for the individual to become truly free and independent. Instead, he is forced to remain dependent on the government and vulnerable to the value destruction created by its fickle policies and aggressive interventions. This is why it makes sense to own hard assets like precious metals, that can store and protect value, and defend it from the reckless monetary manipulations of any government. Claudio Grass, Hünenberg See, Switzerland
Claudio Grass is a Mises Ambassador and an independent precious metals advisor based out of Switzerland. His Austrian approach helps his clients find tailor-made solutions to store their physical precious metals under Swiss law. ClaudioGrass.ch
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